Most Common Types of Auto Dealer Fraud

Auto dealer fraud is the illegal action which auto dealers carry out during vehicle purchase. Auto dealers have all sorts of tricks, which can potentially occur at every stage of vehicle purchase. Whether it occurs during advertisement stage or negotiation process, it is beneficial for you to know all of them. Below you can find the most common types of auto dealer fraud.

Non-disclosure is a type of auto dealer fraud, when while selling you a vehicle the seller conceals important information. A kind of information that significant in determining the value of the vehicle.

The dealer should tell you if the vehicle was rental, was seriously damaged in an accident, if it was flood damaged or its warranty has expired.

Bait and switch is a tactic, which happens during advertisement stage. The seller intentionally promotes the product in an appealing manner and with a luring price. Consequently, attracting many potential buyers whom he later informs that the that vehicle is out of stock and persuades to buy another vehicle at a more expensive price. Presenting a product to have features that it does not have can also fall under this category of auto dealer fraud.

Mileage Rollback is a type of auto dealer fraud. It takes place when dealers roll back the odometer of a used vehicle, resulting in a display of fewer miles than the real mileage. Dealers can use this practices both on digital and mechanical odometers. To avoid this common trap, you can request car’s VIN (Vehicle Identification Number) which will provide you with the vehicle’s last odometer and history records.

Title Washing is another common auto dealer practice, which occurs when a dealer transfers a salvage vehicle into a new state in order for it to receive a clean title. Dealer’s intention in this case is to sell a vehicle, which would be impossible to do in the previous one. They do not disclose this information to the buyer and try to sell the vehicle at a price way higher than it actually has. Previous damages such as flooding can lead up to severe consequences while driving.

Other dealer fraud scenarios to be aware of

  • Assuring that a warranty grants protections, which it actually does not.
  • A dealer can represent an extended service contract as an extended warranty.
  • Assuring the customer who is willing to lease a vehicle that they will own it after finishing the payments.
  • Pretend that the application is pending while the buyer is driving the car. However, upon their return hand a loan with a bigger sum on it. This tactic is known as yo-yo financing.

Being familiar with the types of frauds mentioned above, you’ll  have a lower chance of falling into their trap. However, if you have any doubt you can always consult a specialized auto fraud attorney.